Property Law

Parties to retail leases need to be aware of amendments to the Retail Leases Act 1994 (NSW) (“RLA”) that have come into effect on 1 July 2017.

Some of the key changes to leasing of retail premises and their effects are identified below:

New Lessor Disclosure Requirements– Requires full disclosure in the lessor’s disclosure statement of any obligation of the lessee to contribute to the lessor’s outgoings and prevents recovery from outgoings that are not disclosed. This means a lessee will not be liable to pay any amount in respect of any outgoings unless the liability to pay the amount was disclosed in the disclosure statement for the lease.

Turnover Rent – Lessees may find shelter from turnover rent clauses in leases by utilising online transaction which now excludes online sales revenue, except where the goods are delivered from or at the premises (or the Centre) or where the transaction takes place while the customer is at the premises.

The Commercial Building Disclosure (CBD) Program is a regulatory program that requires the mandatory disclosure of a building’s energy efficiency information to the market when commercial office space above a certain size is offered for sale or lease.

The CBD Program is an initiative of the Council of Australian Governments (COAG). It was established by the Building Energy Efficiency Disclosure Act 2010 and is managed by the Australian Government Department of the Environment and Energy.

Changes Made

In essence:

from 1 July 2017 the mandatory disclosure threshold on commercial office space will decrease from 2000 square metres to 1000 square metres

this means owners and landlords of smaller commercial office buildings may need to disclose the building’s energy efficiency when they sell or lease their property after this date

Tips

Our Matthews Folbigg Property Law team recommends building owners/landlords, tenants who sub-lease and real estate agents:

review these property law changes

seek the assistance of a property lawyer to understand the impacts of these property law changes

Matthews Folbigg is one of Western Sydney's leading law firms located in the heart of Parramatta. We exist to make a difference and we take pride in our work and in the role we play in helping our clients to find solutions, resolve disputes, seize opportunities, and create and protect value.